the essential role of ste plants in the future electricity mix dr. … · 2016. 6. 6. · dr. luis...

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Concentrated Solar Thermal and Solar Chemistry

Info day, Athens 27 May, 2016

The essential role of STE plants in the future electricity mixDr. Luis Crespo, President of ESTELA

EUROPEAN SOLAR THERMAL ELECTRICITY ASSOCIATION

The big question mark:

Onshore Wind and PV have reached already competitive cost levels.

Thus, is it still worth continuing to support the STE technology?

Current

gap

14 c€/kWh

6 c€/kWh

STE

5 GW

Wind

400 GW

PV

200 GW

Value

Maturity

� The PPAs for the two recently awarded STE plants in Morocco Noor 2 & 3 (200 MW PT & 150 MW T) were

15% lower than the previous one for Noor 1 awarded 2 years ago.

� A 110 MW STE plant with 17,5 hours of storage, partly hybridized with PV, was recently selected in Chile with

a PPA of $110/MWh, in competition with all other generation technologies including Gas Combined Cycle.

� The tariff for the current “Expedited round” in South Africa is close to 20% less than the previous one for

Round 3 established 18 months ago.

Only a fool confuses value with priceabout “Maturity”

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RES technologies account for

most of the new capacity

additions in the last years at

world level and this trend

will increase exponentially in

the near future

� Which financing organization could take the risk of uncertain carbon taxes or even strong operational

restrictions during the payback period of the loans?

� Who can ever promote - on a pure commercial basis - a new coal, gas combined cycle or nuclear power

plant in most of the countries in the world?

Therefore RES will in the future rarely compete with conventional power plants …


… but high penetration of non dispatchable technologies in simply unsustainable

In countries with

quick increasing

capacity needs

� The increase of the share of intermittent electricity

generation is due to the fact that in many countries additional

generation is auctioned so as to secure a long-term PPA

� This approach leads to situations in which the offer could

exceed the demand and the subsequent issues: what to do

with electricity surpluses and how to fairly compensate the

old conventional plants, effectively providing the necessary

back up, but operating only few hours a year?

� It is also foreseeable that markets will - at a given moment -

send investors signals about foreseeable low investment yield

for a product offered by most market actors at the same time,

which will certainly reduce the resulting marginal prices and

challenge the business cases for such investments.

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There are two types of renewables

� One is the cheaper non-

dispatchable

� The other one is the “still-more-

expensive” but dispatchable

technology - such as solar

thermal electricity STE/CSP

Following the initial phase of RES deployment – reaching now about 400 GW of

Wind and 200 GW of PV worldwide- time has come to face an essential fact

Achieving a CO2-free power system

will be only possible with a larger

share of dispatchable renewables


� What does operational value means:

Operational value represents the avoided costs of conventional generation at their respective dispatching times along

with related ancillary services costs, such as spinning reserve, etc. Savings on emission costs are also accounted

� What does capacity value means:

Capacity value reflects the ability to avoid the costs of building new conventional generation in response to growing

energy demands or plant retirements

Conclusion:

It is equivalent for the total

cost of the system to pay 5

to PV than 10 to STE

VALUE OF SOLAR POWER ACCORDING TO RE PENETRATION SHARE

Example for 33% and 40% RE shares in California (NREL, May 2014)

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The guiding principle for further investment steps towards a sustainable energy

transition should not only be how much a generated kWh in a given power plant costs

based in CAPEX/OPEX. Instead, the value it effectively adds to the system should be

from now on the essential factor for deciding on investments. The metric of LCOE may

be useful for academic purposes, but it is no longer supportive of a longer-term energy

policy-making resulting in system planning decisions and support schemes.

The “Value” versus “Cost” approach is being understood by more and more policy makers

and reference organizations, although it will take a while to abandon unspecific

auctioning when supporting the deployment of new RE capacity in the different countries

LCOE is not a valid metric any longer

� Firmness of supply is a step beyond dispatchability

Variable

Firm

Dispatchable

Gas and storage: the perfect combination of gas turbines

with molten salt tower plants

This concept can be defined as “decoupled Integrated

Solar Combined Cycle”. It has nothing to do with the

ISCC since it provides a much higher share of the

solar part.

It will have nearly the same efficiency than the

combined cycles but its operation will be much easier

and flexible.

Reference HYSOL project

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10 MW STE plant co-located with 1 MW PV

in the Solucar complex, Seville, Spain

Andasol plants (150 MW) and

wind parks (200 MW) in the

province of Granada, Spain

STE plants could facilitate the deployment of variable RES power plants

Partly dispatching STE at the evening peak to complement

PV plants will increase significantly the operational and

capacity value of hybrid STE/PV plants

Examples of existing co-location of plants


THE REASONS FOR A BRILLIANT STE FUTURE

1. TechnicalSTE is the only dispatch-able and grid-friendly renewable technologywith potential enough to firmly meet the electricity needs worldwidein order to achieve an almost carbon free generation system. A wise mix with other R.E. technologies will be the right choice.

2. Local Economic DevelopmentLocal content of STE plants - and conversely its GDP contribution - shouldbe one of the main drivers behind the coming supporting policies in most countries of the Sunbelt.

3. Affordable cost with higher valueSTE plants are currently a cost competitive choice to supply the increasingpower demand of emerging countries compared with “investing twice” asit would be the case regarding other fluent R.E. technologies + CC backup. Furthermore STE plants will show important reductions when approachingsimilar values of Wind (400 GW) and PV (200 GW) from their current 5 GW

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Some recent data on STE production in Spain

Important milestones in 2015

� Installed Power 2300 MW (50 plants)

� New yearly record 5,1 TWh

� Max. contribution > 8 %

At many moments from May till September

� Max. daily contribution around 5%

At many days in June, July and August

� Monthly production close to 4 %

889 GWh in July

0

500

1000

1500

2000

2500

21000

23000

25000

27000

29000

31000

33000

35000

37000

Typical weekly curves in in July

Demanda (MWh) Termosolar (MWh)

All the 50 STE Plants in Spain are

performing according to the expectations

The learning curve took between 1 to 2

years depending on the plant.

Improvements in operation and O&M

cost reductions are still being applied

These curves show how

good STE production

matches the demand

Scale on the left Scale on the right

Typical production in a summer dayhttps://demanda.ree.es/demanda.html

After sunset the 18 STE plants

with storage were providing 700

MW until 5:00 am

Important to notice:

Although the installed PV power is 4,7 G its contribution

in sunny hours is far below than double the STE one

Hourly production for past days

can be easily tracked with the calendar

and the pointer.

The extended daily production can be

also seen when pointing on the STE

portion of the generation structure These twohills show

how reliable is

STE production in sunny days

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Monthly production

record 889 GWh

Historic production of STE plants in Spain

Yearly production

record 5.113 GWh


Supports

Savings in CO2 rights

Savings from replacing

imported fossil fuels

Fiscal contribution(Social Security, Corporate, Personal

and Local Taxes,)

Contribution to GDP

+ Industrial development

+ Re-balancing the generation mix

+ Reinforcement of the grid

+ Attraction of foreigner investment

+ Regional economical convergence

Macroeconomic Benefits for the country’s economy

Comparison between premiums and returns of a STE deployment program

Unemployment subsidies

Supporting STE was a

wise decision for Spain and

it will be so in all countries

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Industry localization in Spain for solar field components

Prerequisite:

Stable program of some

few hundred MW per year

Absorber tubes

Curved mirrors

Collector structure


Other

direct

effects

on

Industry

Reorientation of other mature industries:- Construction, civil works

- Engineering of conventional power plants

- Electricity Transmission Infrastructures

- Galvanizers, …

Reinforcement of some industry sectors:- Piping and tanks

- Heat exchangers

- Boilers

- Cabling

- Telecommunication and control

+ Reinforcement of supplier’s subsidiaries in the country:Promotion, Maintenance, Spare parts, …

Huge impact in auxiliary sectors- Cleaning, environmentalists, labs, …

- Road transport

- Training, …

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Required value for a 25-year PPA without escalation for a standard 150

MW 5-hour storage STE plant without any kind of financial public support

Source ESTELA

Stars reflect the PPA harmonized – disccounting

the differences with the “standard” plant – values

of real projects in different countries


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Are we comparing apples to apples?

Cost/kW is not the right indicator. Comparisons must

be - at least - made in terms of investment for the

same yearly production.

When talking at system level what matters is not

simply generation cost but system costs and

benefits, which comprise its “value”.

Apart from dispatchability and grid integration

issues, which provide a clear and accountable “plus”

to STE and macroeconomic impacts, which policy

makers should take into account, there are other

aspects which are usually disregarded such as:

Clearly not !!!

Life of components, performance degradation, impact of temperature on performance,

losses in charging and discharging batteries or pumping stations, etc.


� STE is - and will continue to be - the necessary

choice when planning addition of new

capacity in sunny countries.

� STE would be also the preferred choice for

policy makers when all the impacts - technical

and economical - are duly taken into account

Time has come to realize that it is not enough establishing global goals on the share of

RE by 2030 or 2050. Linking the necessary high contribution of dispatchable

generation technologies to these goals is already a must. Otherwise a CO2 free

generation system will not be feasible and business cases for any RES investments will

no longer be valid.

Regarding the further development of RES we should move from the current short-sighted

COST approach to a full VALUE approach for upcoming investments. This will trigger a better

balanced share between intermittent and flexible renewables in the power system – the only

sustainable pathway to a true energy transition

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Countries are loosing money every single

day as long as they don’t launch a specific

STE support program

Solar Thermal Electricity:The great opportunity for sunny countries (like Greece)

� The generation mix for 2030 must be planned today

� Most of the old coal fired power plants will be decommissioned sooner than later

� Dispatchable capacity from renewable sources will become a must

� The required support for STE plants is much more affordable today than 5 years ago

� Premiums to STE generation will start being payed 3 years after the program is launched,

while the positive macroeconomic impact will be noticed from the beginning and will

last forever

Thank you for your [email protected]

www.estelasolar.org

www.protermosolar.com

the essential role of ste plants in the future electricity mix dr. … · 2016. 6. 6. · dr. luis...

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